EXHIBIT 38
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RULES CONSTITUTING
THE OXFORD GLYCOSYSTEMS LIMITED
1989 SHARE OPTION SCHEME
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[Version 4 as amended in August 1995]
Baker & McKenzie
100 New Bridge Street
London EC4V 6JA
Tel: 0171 919 1000
Fax: 0171 919 1999
INDEX
CLAUSE PAGE
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1. Definitions ............................................................ 1
2. Invitation to Apply for Options ........................................ 3
3. Applications for Options ............................................... 4
4. Grant of Options ....................................................... 4
5. Limitations on Grants .................................................. 4
6. Exercise of Options .................................................... 5
7. Takeovers and Liquidations ............................................. 8
8. Variation of Share Capital ............................................. 10
9. Manner of Exercise of Options .......................................... 10
10. Administration and Amendment .......................................... 10
RULES OF THE OXFORD GLYCOSYSTEMS GROUP
SHARE OPTION SCHEME
1. Definitions
In these Rules, unless the subject or context otherwise requires:
1.1. "acting in concert" shall be defined in accordance with the
City Code on Takeovers and Mergers;
1.2. "Adoption Date" means the date on which the Scheme is
adopted by the Company at a general
meeting of the Company;
1.3. "Associated Company" has the same meaning as in Section 416
of the Income and Corporation Taxes Act
1988;
1.4. "Auditors" means the auditors for the time being of
the Company (acting as experts and not
as arbitrators);
1.5. "Board" means the board of directors of the
Company;
1.6. "Company" means Oxford GlycoSystems Limited;
1.7. "Control" has the same meaning as in Section 840
of the Income and Corporation Taxes Act
1988;
1.8. "Date of Grant" means (i) the date on which an Option
is, was or is to be granted under the
Scheme or
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(ii) at the discretion of the Board,
such earlier date when the individual to
whom the grant is made first became an
Eligible Person as defined in Clause 1.9
below;
1.9. "Eligible Person" means any employee or director of the
Company or any Associated Company or any
individual who provides consultancy
services to the Company or any
Associated Company;
1.10. "OGSG" Oxford GlycoSystems Group PLC;
1.11. "Option" means a right to subscribe for Shares
granted (or to be granted) in accordance
with these Rules and including (unless
the context requires otherwise) a
Replacement Option;
1.12. "Replacement Option" means a right to subscribe for Shares
granted in accordance with these Rules
over an equivalent number of Shares to
those subject to an Option which has
lapsed on the seventh anniversary of its
Date of Grant pursuant to Rule 6.4.1;
1.13. "Scheme" means an ordinary share option scheme
constituted and governed by these Rules
as from time to time amended;
1.14. "Share" means an ordinary share in the capital
of the Company;
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1.15. "Subscription Price" means the price at which each Share
subject to an Option may be acquired on
the exercise of that Option being the
amount specified by the Board in its
sole discretion;
1.16. "Subsisting Option" means an Option which has neither lapsed
nor been exercised.
2. Invitation to Apply for Options
At any time after the Adoption Date, the Board may in its absolute discretion
select any number of individuals who shall be, or were at the intended Date of
Grant, Eligible Persons and invite them to apply for the grant of Options to
acquire Shares in the Company. Each invitation shall specify:
2.1. the date (being not later than 14 days after the issue of the
invitation) by which an application must be made;
2.2. the maximum number of Shares over which that individual may on that
occasion apply for an Option, being determined at the absolute
discretion of the Board save that it shall not be so large that the
grant of an Option over that number of Shares would cause the limit
specified in Rule 5 to be exceeded;
2.3. the Subscription Price at which Shares may be acquired on the
exercise of any Option granted in response to the application; and
2.4. in the case of Replacement Options, the time or times at which the
Replacement Option is to become exercisable.
Each invitation shall be accompanied by an application in such form, not
inconsistent with these Rules, as the Board may determine.
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3. Applications for Options
Not later than the date specified in the invitation each Eligible Person to whom
an invitation has been issued in accordance with Rule 2 above may apply to the
Board, using the application form supplied, for an Option over a number of
Shares not exceeding the number specified in the invitation.
4. Grant of Options
Not later than the twenty-first day following the issue of invitations the Board
may grant to each applicant who is still an Eligible Person an Option over the
number of Shares specified in his application provided that, where the granting
of Options to meet all the applications received would result in the limit
specified in Rule 5.1 being exceeded, the Board shall scale down the
applications or select among the applicants as it sees fit to ensure that the
aforesaid limit will not be exceeded.
As soon as possible after Options have been granted the Board shall issue a
certificate of Option in respect of each Option in such form, not inconsistent
with these Rules, as the board may determine. Each Option shall be granted under
the Common Seal of the Company.
No Option may be transferred, assigned or charged and any purported transfer,
assignment or charge shall cause the Option to lapse forthwith. Each option
certificate shall carry a statement to this effect.
5. Limitations on Grants
5.1. No Option shall be granted pursuant to Rule 4 above if such grant
would result in the aggregate of:
5.1.1. the number of Shares over which Subsisting Options have been
granted under this Scheme;
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5.1.2. the number of Shares which have been issued on the exercise of
Options granted under this Scheme;
exceeding the greater of (i) 1,900,000 Shares or (ii) 10% of the
Shares then in issue.
For the purposes of this Rule 5 Options shall include all Options granted under
this Scheme and all options granted under any other scheme established by the
Company or any Associated Company thereof.
6. Exercise of Options
6.1. Subject to Rules 7 and 9 and Rule 6.2 below any Option which has not
lapsed, other than a Replacement Option, may be exercised in whole
or in part at any time following the earliest of the following
events:
6.1.1. as to 20% of the Shares over which the Option was granted, the
first anniversary of the Date of Grant;
6.1.2. as to a further 20% of the Shares over which the Option was
granted, the second anniversary of the Date of Grant;
6.1.3. as to a further 20% of the Shares over which the Option was
granted, the third anniversary of the Date of Grant;
6.1.4. as to a further 20% of the Shares over which the Option was
granted, the fourth anniversary of the Date of Grant;
6.1.5. as to the final 20% of the Shares over which the Option was
granted, the fifth anniversary of the Date of Grant,
provided that no Option shall become exercisable in respect of a
further percentage of Shares after (i) either the Option holder or
the Company gives
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notice to the other to terminate the Option holder's employment or
directorship with the Company or any Associated Company or (ii) the
Company passes a resolution for a voluntary winding-up.
6.2. Subject to Rules 7 and 9 below, the Board may stipulate when
granting any Option (other than a Replacement Option) to an
individual who provides consultancy services to the Company or any
Associated Company that any Option which has not lapsed may be
exercised in whole or in part at any time following the earliest of
the following events:
6.2.1. as to one third of the Shares over which the Option was
granted, the first anniversary of the Date of Grant;
6.2.2. as to a further third of the Shares over which the Option was
granted, the second anniversary of the Date of Grant;
6.2.3. as to the remaining third of the Shares over which the Option
was granted, the third anniversary of the Date of Grant,
provided that no Option shall become exercisable in respect of a
further percentage of Shares after (i) either the Option holder or
the Company gives notice to the other to terminate the Option
holder's consultancy service to the Company or any Associated
Company or (ii) the Company passes a resolution for a voluntary
winding-up.
6.3. Subject to Rules 7 and 9 below, any Replacement Option which has not
lapsed may be exercised in whole or in part at any time or times
specified by the Board pursuant to Rule 2.4 above.
6.4. An Option shall lapse on the earliest of the following events:
6.4.1. the seventh anniversary of the Date of Grant;
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6.4.2. the Option holder's death;
6.4.3. six months after the date when the Option holder ceases to be
a director, employee, or consultant of the Company or any
Associated Company by reason of
6.4.3.1. injury or disability evidenced to the satisfaction of
the Board); or
6.4.3.2. redundancy (within the meaning of the Employment
Protection (Consolidation) Act 1978; or
6.4.3.3. retirement at contractual retirement age or early
retirement by agreement with the Company or any
Associated Company; or
6.4.3.4. the transfer of the undertaking or part-undertaking in
which the Option holder is employed, or to which the
Option holder provides services, to a person other than
the Company or any Associated Company
6.4.3.5. the Company for which, or to which, the Option holder
provides services ceasing to be an Associated Company of
the Company
and is no longer continuing as a director, employee or
consultant (provided that the above-mentioned six month period
shall be a period of twenty four months if, at the date in
question, the shares of OGSG are not tradeable on any public
stock exchange (including for this purpose the exchange known
as NASDAQ);
6.4.4. the date when the Option holder ceases to be a director,
employee or consultant of the Company or any Associated
Company for any reason other than one of the reasons referred
to in Rule 6.4.3 above and is
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no longer continuing as a director, employee or consultant of
the Company or an Associated Company;
6.4.5. six months after the Option has become exercisable in
accordance with Rules 7.1 or 7.2 or, in the case of Rule 7.3,
the date when any person ceases to be bound or entitled as
mentioned therein; and
6.4.6. the Option holder being adjudicated bankrupt.
7. Takeovers and Liquidations
7.1. If any person:
7.1.1. obtains Control of the Company; or
7.1.2. obtains control of OGSG as a result of making:
7.1.2.1. a general offer to acquire the whole of the issued ordinary
share capital of OGSG which is made on a condition such that
if it is satisfied the person making the offer will have
Control of OGSG; or
7.1.2.2. a general offer to acquire all the shares in OGSG which are of
the same class as the shares;
then any Subsisting Option may be exercised in full (regardless of
the extent to which it had by then become exercisable under Rules
6.1.1. to 6.1.5. or 6.2.1. to 6.2.3. above or, in the case of
Replacement Options, under the terms relating to the time or times
of exercise originally imposed by the Board pursuant to Rule 2.4
above) within six months of the time when the person making the
offer has obtained Control of the Company or OGSG as the case may be
and any condition subject to which the offer is made has been
satisfied. Provided that in the event of Rule 7.3 applying in
relation to the same change of Control, the right to exercise a
Subsisting Option under this
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Rule 7.1 shall terminate upon the person referred to in Rule 7.3
below ceasing to be bound or entitled as referred to in Rule 7.3.
7.2. If the Company passes a resolution for voluntary winding up, any
Subsisting Option may be exercised within six months of the passing
of the resolution.
7.3. If any person becomes bound or entitled to acquire shares in the
Company or OGSG under sections 428 to 430 of the Companies 1985,
then any Subsisting Option may be exercised in full (regardless of
the extent to which it had by then become exercisable under Rules
6.1.1 to 6.1.5 or 6.2.1 to 6.2.3 above or, in the case of
Replacement Options, under the terms relating to the time or times
of exercise originally imposed by the Board pursuant to Rule 2.4
above) at any time when that person remains so bound or entitled.
7.4. For the purposes of this Rule 7, a person shall be deemed to have
obtained Control of the Company or OGSG as the case may be if he and
others acting in concert with him have together obtained Control of
it, provided however that no change of Control shall be deemed to
occur by reason of changes in the percentage of ownership of the
shareholders as of the date immediately following completion of the
transactions contemplated in the Investment Agreement dated 14
September 1988 between the Company, Advent Euroventures Limited
Partnership and others, and provided further that no change of
Control shall be deemed to occur by reason of the acceptance by
shareholders of the offers made in a circular dated 19 November 1992
by OGSG to acquire all the Shares of each class in the capital of
the Company in exchange for new Shares in OGSG.
7.5. The exercise of an Option pursuant to the preceding provisions of
this Rule 7 shall be subject to the provisions of Rule 9 below.
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8. Variation of Share Capital
In the event of any capitalization or rights issue or any consolidation,
sub-division or reduction of capital by the Company or OGSG, the number of
Shares subject to any Option and the Subscription Price for each of those Shares
shall be adjusted in such manner as the Auditors confirm in writing to be fair
and reasonable provided that the aggregate amount payable on the exercise of an
Option in full is not increased.
9. Manner of Exercise of Options
9.1. No Option may be exercised at any time when the shares which may be
thereby acquired are not Shares as defined in Rule 1.
9.2. An Option shall be exercised by the Option holder, or as the case
may be his personal representatives, giving notice to the Company in
writing of the number of Shares in respect of which he wishes to
exercise the Option accompanied by the appropriate payment and the
relevant option certificate and shall be effective on the date of
its receipt by the Company.
9.3. Shares shall be allotted and issued pursuant to a notice of exercise
within 30 days of the date of exercise. Save for any rights
determined by reference to a date preceding the date of allotment,
such Shares shall rank pari passu with the other shares of the same
class in issue at the date of allotment.
10. Administration and Amendment
10.1. The Scheme shall be administered by the Board whose decision on all
disputes shall be final.
10.2. The Board shall be entitled at any time to appoint a committee to be
known as the "Compensation Committee", and to consist of such
persons as the Board shall in its sole discretion determine. The
Compensation Committee will be entitled to exercise all powers given
to the Board by these Rules, including but
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not limited to the power to issue invitations to apply for the grant
of Options pursuant to Rule 2, but excluding the power to amend
these Rules pursuant to Rule 11.3 below. The procedure to be
followed by the Compensation Committee in exercising such powers
shall be determined by the Board, which will also be entitled to
suspend or disband the Committee at any time.
10.3. Any notice or other communication under or in connection with the
Scheme may be given by the Company either personally or by post and
to the Company either personally or by post to the secretary; items
sent by post shall be pre-paid and shall be deemed to have been
received 72 hours after posting.
10.4. The Company shall at all times keep available sufficient authorised
and unissued Shares to satisfy the exercise to the full extent still
possible of all Options which have neither lapsed nor been fully
exercised, taking account of any other obligations of the Company to
issue unissued Shares.
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OXFORD GLYCOSYSTEMS LIMITED
1989 SHARE OPTION SCHEME
INVITATION LFTTER
To: [the employee] Date
1. You are hereby invited to apply for an option over up to Ordinary
Shares of one penny each of Oxford Glycosystems Limited at a price
of ________ per share, under the terms of the Scheme. This
invitation may be accepted only by completing the enclosed
Application Form and sending it to the company to be received by not
later than [ ].
To be inserted in respect of Replacement Options:
[2. Your option will be exercisable as follows: [insert time (or times)
when the option will be exercisable and the extent to which it will
be exercisable at those time(s)].]
Yours faithfully
OXFORD GLYCOSYSTEMS LIMITED
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OXFORD GLYCOSYSTEMS LIMITED
1989 SHARE OPTION SCHEME
APPLICATION FORM
To: Oxford Glycosystems Limited ("the Company")
Date:
I have received a letter inviting me to apply for an option over not more than
[ ] Ordinary Shares of one penny each of the Company at a price of [ ]
per Share under the terms of the Share Option Scheme.
I hereby apply for the grant of an option to subscribe for [ ] Shares.
I note that, if my application for the grant of an option over the Shares is
granted in part or in full, any option to subscribe for or purchase Shares will
be upon and subject to all the terms, conditions and provisions of the Share
Option Scheme. I hereby agree to be bound in contract with the Company to
observe the Rules of the Share Option Scheme (a copy of which I have received)
and any conditions notified to me by the Company.
Yours faithfully
[the Employee]
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OPTION CERTIFICATE NUMBER
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OXFORD GLYCOSYSTEMS LIMITED
(Registered in England under No. 2271935)
TOTAL NUMBER OF ORDINARY SHARES INCLUDED IN THIS OPTION
This is to certify that _________________ was granted an Option on the _____ day
of _________ to subscribe for _______ shares of ________ each in Oxford
Glycosystems Limited at a Subscription Price of _____ per share upon the terms
of the Oxford Glycosystems Limited 1989 Share Option Scheme. The Option, which
may not be assigned or transferred, may be exercised at the time and in the
circumstances [permitted in the Scheme]. [In the case of Replacement Options:
specified in your Invitation Letter.]
Signed on behalf of
Oxford Glycosystems Limited
Date __________________ ____________________ Director
Notes:
(1) This certificate must be surrendered on the exercise in whole or in part
of the Option.
(2) The number of shares covered by this Option and/or the Subscription Price
may be varied in accordance with the Rules of the Scheme.
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OXFORD GLYCOSYSTEMS LIMITED
1989 SHARE OPTION SCHEME
NOTICE OF EXERCISE OF OPTION
To: Oxford Glycosystems Limited ("the Company")
Date:
I hereby exercise my option to subscribe for [ ] Ordinary
Shares of one penny each in the Company at a price of [ ] per share.
I attach my original option certificate number [ ] for notation of
the number of Ordinary Shares over which I have exercised this Option.
I enclose my cheque for (Pound) [being the number of shares referred to
above multiplied by the price per share].
I request you to allot to me the shares referred to above, subject to your
Memorandum and Articles of Association and to the Rules of the Company's 1989
Share Option Scheme and to despatch a share certificate to me.
Yours faithfully
Notes:
(1) This notice will not be valid unless it is accompanied by the original
option certificate, and a cheque for the total amount payable on exercise.
(2) The notice may refer to all or just some of the shares covered by the
option certificate. If it refers to only some of the shares, the option
certificate will be noted and returned to me.
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(3) The times at which, and the conditions subject to which, an option may be
exercised are [set out in the Rules of the Scheme]. [In the case of
Replacement Options: set out in the Rules of the Scheme and in your
Invitation Letter].
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